The European markets are lower on Monday, as economic concerns once again dampened investor sentiment with fresh round of worries originating from Greece and Spain. Concerns about cooling growth in China added to the woes, and the Asian markets ended firmly in the red.
Spain's Valencia and Murcia regions have asked for financial aid, leading to speculation that a sovereign bailout may be necessary. The yield on 10-year Spanish government bonds climbed to 7.46 percent, touching a new euro-era record.
The Spanish government cut its economic forecast on Friday. The government now expects the economy to shrink 0.5 percent in 2013, in contrast to its earlier forecast for a growth of 0.2 percent. The country sees recession extending into next year as it adopts more austerity measures.
Meanwhile, Greek Prime Minister Antonis Samaras warned that the country is facing economic hardship similar to what the U.S. faced in the 1930s.
The International Monetary Fund has signaled that it may not participate in further economic assistance for Greece, heightening the risk that the country may run out of cash by September, Germany's Der Spiegel reported Sunday citing unidentified EU officials.
The European Central Bank said Friday that the marketable debt instruments issued or fully guaranteed by the Greek government would become ineligible for use as collateral by July 25. Liquidity needs may be addressed by the relevant national central bank in line with existing Eurosystem arrangements.
In an interview to broadcaster ARD on Sunday, German Vice Chancellor Philipp Roesler said if Greece does not meet the obligations, then there can be no more payments. A Greek exit from the Eurozone has long ago lost its horror, he added.
The Euro Stoxx 50 index of eurozone bluechip stocks is declining 2.05 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is retreating 1.79 percent.
The German DAX is falling 1.66 percent and the French CAC 40 is losing 2.03 percent. The UK's FTSE 100 is retreating 1.76 percent and Switzerland's SMI is dropping 1.06 percent.
In Frankfurt, Commerzbank is retreating 6 percent and Deutsche Bank is declining 5.4 percent. Berenberg initiated Deutsche Bank with a "Sell" rating.
Allianz is declining 3.7 percent and Infineon Technologies is dropping 3.6 percent.
Volkswagen, BMW and Daimler are losing between 1.7 percent and 1.2 percent.
Bayer said the addition of cancer drug Tarceva to standard therapy Nexavar in a Phase III trial in patients with Hepatocellular carcinoma did not improve overall survival than Nexavar alone. The stock is marginally down.
Fuchs Petrolub is declining over 4 percent. Cheuvreux cut the stock to "Underperform" from "Outperform."
Hugo Boss is falling 1.3 percent. UBS initiated the stock with a "Buy" rating.
In Paris, BNP Paribas, Societe Generale and Credit Agricole are declining between 7 percent and 5.7 percent. Insurer Axa is falling 4.9 percent.
Renault is losing 2.4 percent. Peugeot is modestly down.
Veolia Environnement is declining 4.4 percent. EDF is losing 4.1 percent.
In London, Anglo American and Antofagasta are declining around 3.8 percent each. BHP Billiton is losing 3.3 percent.
African Barrick Gold is declining 5.7 percent. The firm reported a sharp decline in pre-tax profit for the first half of the year, reflecting the planned lower production and a 12 percent increase in gold price, amid higher costs. Petropavlovsk is declining around 5 percent.
Barclays is dropping 3.5 percent, Lloyds Banking is losing 2.9 percent and Royal Bank of Scotland is retreating 4.3 percent.
Insurer Aviva is declining 5.5 percent. Evraz is retreating 6.5 percent.
Groupe Eurotunnel reported a higher profit for its first half and expects a jump in traffic due to the Olympics games. The stock is climbing over 8 percent. Groupe Eurotunnel shares are falling over 6 percent in Paris.
XP Power is adding 6.5 percent. The critical power control components maker expects higher results in its second half, even though first-half results were hurt by softened demand amid weak market. The company also announced increased order take in the first half and a higher dividend.
Philips is climbing over 6 percent in Amsterdam after reporting a profit for the second quarter.
Julius Baer is up 1.1 percent in Zurich. The firm posted a higher profit for its first half.
Credit Suisse is declining 2.5 percent. Berenberg initiated the stock with a "Sell" rating.
Banco Popular Espanol is declining 6.3 percent in Madrid and Bankinter is dropping 5.6 percent. Bankia is losing 4.7 percent.
Across Asia/Pacific, Australia's All Ordinaries retreated 1.7 percent and China's Shanghai Composite Index fell 1.3 percent. Hong Kong's Hang Seng and Japan's Nikkei 225 declined 3 percent and 1.9 percent, respectively.
In the U.S., futures point to a lower open on Wall Street. In the previous session, stocks lost ground, hurt by worries about Europe and lingering concerns about the global economy. The Dow Jones Industrial Average fell 0.9 percent, the Nasdaq slipped 1.4 percent and the S&P 500 dropped 1 percent.
In the commodity space, crude for September delivery is losing $2.64 to $89.19 per barrel and August gold is falling $11.1 to $1571.7 a troy ounce.
by RTT Staff Writer
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